Report of Committee on Terminology;

Page 1

Accounting Research
BULLETINS
Copyright 1942 by American Institute of Accountants
•
Issued by the Committee on Accounting Procedure, American Institute of Accountants, 13 East 41st Street, New York, N. Y.
October, 1942
Report of Committee on Terminology
No. 16
(Special)
FOREWORD
THE 1942 ANNUAL REPORT of the committee on terminology deals with "depreciation" and is presented herewith. The committee on accounting procedure has authorized publication of this report as an accounting research bulletin, but it should not be regarded as a formal pronouncement of that committee. The research department and the committee on terminology will welcome suggestions and comments on the contents of this report from members of the Institute and others.
REPORT OF THE COMMITTEE ON TERMINOLOGY ANNUAL REPORT, 1942
Pursuing its policy of discussing terms used in accounting in spe-cialized senses, the committee on terminology in this report considers the word "depreciation."
It must be admitted that the use of the term in accounting is un-satisfactory, since it is applied in its normal sense to some assets, such as marketable securities, and in a specialized sense to others, such as fixed-capital assets. Moreover, the specialized sense differs not only from the colloquial sense but also from the sense in which the term is used in engineering, and is far removed from the root-meaning of the word itself. Therefore, if reluctance to accept temporary inconven-ience in order to achieve permanent clarification stands in the way of the substitution of a more descriptive term, it may be said that the profession at least owes it to the public to define with reasonable pre-cision and clarity the meaning of the word when used as a term of art in accounting.
To THE COUNCIL OF THE AMERICAN INSTITUTE OF ACCOUNTANTS:
GENTLEMEN:
DEPRECIATION
107